Most people purchase life insurance with others in mind. They’re not thinking about themselves when they select a policy, but instead are considering their loved and what would happen if the unexpected were to occur.
But there’s more to life insurance than most people realize. A living benefits rider allows you to access your life insurance policy funds while you’re still living under certain conditions. Is a living benefits rider something you should consider? Keep reading to learn how a living benefits rider may be able to help you and your family.
What is a living benefits rider?
A living benefits rider gives you the option to accelerate your death benefit if you’re certified by a licensed health care practitioner as having a permanent chronic illness or severe cognitive impairment. This is optional, additional coverage that you can purchase and add on to your base policy to enhance your total life insurance coverage.
If you purchase a living benefits rider, and you’re certified as having a debilitating medical condition, the rider may pay you a lump-sum or monthly payment that’s deducted from your total death benefit. The advanced death benefit is paid directly to you and can be used for any purpose—replacing lost income, covering medical expenses, paying for care, making home modifications and providing stability during your family’s time of need.
Any remaining money that isn’t advanced to you will be left and paid out to your beneficiary after you pass away.
How a living benefits rider can work
To better understand the value of a living benefits rider, consider Tom’s story…
Life is good for Tom and his wife, Jane. They enjoy a busy life raising their two active sons. When they’re not at work and school, the family is running from baseball practice to soccer games to SAT prep courses for their oldest. Downtime is rare for Tom and his family, but when they get a chance to relax, they enjoy game nights at their house, for which Tom and Jane saved for years. Tom hates to think about it, but he knows that if the unexpected happened and he suddenly passed away, they could lose it all—their lifestyle, home and secure future.
Tom attends an employee benefits presentation at work. He decides to purchase a life insurance policy and a living benefits rider. With this living benefits coverage, he has the option to accelerate his death benefit if he is certified by a licensed health care practitioner as having a permanent chronic illness. Tom knows this money could help provide calm and stability in a time of need.
What would happen if…?
Alzheimer’s disease runs in Tom’s family. What if Tom is certified as chronically ill with Alzheimer’s disease when he turns 80 years old? His family would face large medical bills and caregiver expenses on top of their everyday expenses.
In the event of a diagnosis, Tom could receive a lump-sum advance from the living benefits rider. Tom and Jane could use the money to pay for in-home care and to make their home more accessible. As long as the policy is kept in force, Tom’s family would collect the remainder of the death benefit after his passing.
If Tom does not get Alzheimer’s disease, Tom’s family will receive the entire death benefit when he passes away, many years in the future.
We’re here to help!
Life insurance helps protect the people you love most, but don’t forget that a living benefits rider can help provide your family financial security while you’re still living. Are you ready to learn more? Give us a call at
(800) 525-7662, and we’ll pair you up with a local Washington National agent.
Definitions, limitations, exclusions and requirements of accelerated death benefit riders may vary by issuing company, rider, policy and state. Talk to your agent for more information Insurers and their representatives are not permitted by law to offer tax or legal advice. The general and educational information here supports the sales, marketing or service of insurance policies. Based upon individuals’ particular circumstances and objectives, they should seek specific advice from their own qualified and duly-licensed independent tax or legal advisors.
Insurers and their representatives are not permitted by law to offer tax or legal advice. The general and educational information here supports the sales, marketing or service of insurance policies. Based upon individuals’ particular circumstances and objectives, they should seek specific advice from their own qualified and duly-licensed independent tax or legal advisors.